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Back in May 1993, as I was wrapping up my PhD, I took a trip to Shenzhen to look for work. While at a friend's house, I was flipping through the Shenzhen Special Zone Daily and was immediately drawn to a full-page recruitment ad from Huawei. It specifically highlighted that they were looking for people with a master's degree or doctorate. It was odd. As the frontier of China's reform and opening up, Shenzhen was a hub for processing and trade, and very few companies were hiring people with higher education. Out of curiosity, the next day I went for an interview and ended up getting offered a job. As the day of my graduation neared, I had already received several offers but the one from Huawei stood out. Their HR manager would call me every week, saying everything was ready and they were expecting me. The respect they showed me, the urgency of their calls, and the promise of a salary five times more than my PhD supervisor's made the decision easy. I chose Huawei. When I came onboard in August, I realized that, of the company's 600 employees, more than 200 were R&D engineers, as well as a ton of postgraduates. Five PhDs joined that same year. It was unimaginable anywhere in China, especially in Shenzhen, because the entire country was producing only about 2,000 PhD graduates a year. Huawei's huge bets on talent in its early years were a clear sign of its commitment to innovation and forward-looking investment. Back then, the R&D team was working on digital stored program control switches. As China's economy soared, demand for household and office phones far outstripped supply. Getting a phone line installed was difficult and expensive for years. Switches from Western vendors were available in China, but they used a wide range of incompatible standards and went for about 3,000 Chinese yuan per line. A fortune at the time. This presented an opportunity. At the time, major urban centers were surrounded by geographically dispersed townships and villages. Setting up a complete switch for each location didn't make economic sense, and connecting distant communities with copper was both expensive and prone to signal loss. So we came up with a fiber-connected remote switching module, which allowed for a single centralized system to provide network coverage for an entire county. Our customers liked it. And that's how we managed to rapidly grow our business in a head-to-head race with established Western vendors, all of which had joint ventures with our customers. Our product was cheaper, around 1,000 yuan per line, with a profit margin higher than 20%. This helped sustain Huawei's rapid growth and gave us much-needed cash flow. In a short span of ten years (1993–2002), our headcount climbed to 22,000, including over 10,000 R&D engineers, and revenue was closing in on 4 billion USD. Many leading US companies started out small. They struck out on their own, probing forward one step at a time, selling products to make money, and investing it back into R&D. The whole "pulling yourself up by your bootstraps" ethos. And the same can be said for Huawei. In 2002, I was unexpectedly put in charge of a major transformation program called Integrated Product Development (IPD). Then in 2005, I was appointed the Chair of the Investment Review Board (IRB), a role that oversees all of the company's product investments. When I became Rotating CEO in 2011, I handed over the IPD-related responsibilities, but even now I still devote a lot of my time to keeping IPD up-to-date and driving Huawei's business development. IPD was a game changer in how we developed products and made R&D investment decisions. It also completely reshaped our R&D structure. Prior to this transformation, our R&D successes were highly dependent on individual outperformers, and high-quality products were a matter of chance. The IPD transformation put systems in place for us to reliably deliver competitive, quality products that meet our customers' needs. IPD was the brainchild of our founder Ren Zhengfei. In 1997, he visited several US tech companies and was inspired by the way they developed their products. Following this visit, he brought on IBM as a consultant to help us design and execute a sweeping transformation across our R&D investment decision processes, organization, and culture. The transformation kicked off in 1999. I was one of many participants in the program until 2002, when I was given the reins to work alongside IBM consultants and drive the transformation forward, rolling out the IPD process across all of R&D. Over the course of a decade, we developed a more efficient decision-making process for R&D investment, a process for integrated product development, and the corresponding organizational structures, capabilities, and IT systems – collectively called the IPD Management System. It's this system that has enabled us to not only manage an ever-expanding R&D team (from 10,000 to 110,000 members today), but keep delivering innovative products that meet our customers' evolving needs. From 1997 to 2006, Huawei paid IBM nearly 600 million USD in consulting fees. This may very well be the largest single corporate consulting engagement in China's history. In 2003, I was appointed President of the Wireless Product Line. At the time, the division had just over 2,000 people, and was working on 3G products. My mission was to transform Huawei from a fixed-network equipment supplier to a provider of both fixed and mobile network equipment. As China kept delaying the issuance of 3G licenses, we were forced to pursue market expansion overseas. Back then, Richard Yu was responsible for WCDMA products, one of the main technologies that powers 3G networks. While visiting a base station equipment room with the Dutch carrier Telfort, he discovered that site acquisition costs in Europe were exceptionally high, and there wasn't really any room for new base stations anyway. He called me from Europe to discuss whether we could split a base station into two parts – one part placed on the cell tower, and the other into a small box that could be installed inside the existing base station's cabinet. We both thought it was a plausible solution, so we decided to create a distributed base station. The solution was met with resistance from many carriers and equipment vendors, but it eventually became standard for the 3G, 4G, and 5G base stations we see today. Richard also proposed integrating 2G and 3G into a single base station during a discussion with Telefónica Germany. Later, in collaboration with Vodafone, we launched SingleRAN, a solution that physically integrates 2G, 3G, 4G, and 5G into a single base station. This, too, became the de facto standard for base stations around the world. These two groundbreaking solutions – the distributed base station and SingleRAN – established Huawei's global leadership in mobile communications. To find our Noah's Ark amid the coming flood of digital information, we strengthened our basic research efforts. In 2011, we consolidated the company's research teams into a new organization – 2012 Labs, named after the film 2012: Doomsday. It would serve as a platform for investment in sustained innovation, including basic research, core technologies, and engineering capabilities. At the same time, we changed our R&D investment model: Part of 2012 Labs' funding would come from the company, and the rest from its business units. From day one, I have been shaping the Labs' organization, team, capabilities, and future-oriented research projects. 5G, autonomous driving, and Ascend were all incubated there. We began researching 5G as early as 2009, ultimately becoming a major contributor to 5G standards and one of the world's largest holders of 5G patents, cementing Huawei's global leadership in the field. In 2012, I led the establishment of the Internet of Vehicles Lab under 2012 Labs to conduct research on future automotive technologies, a move that led to our autonomous driving solutions, laying the foundation for our leadership in this domain as well. In 2016, the Labs began researching AI, securing us a place in the race to come. Thanks to the Labs' pioneering basic research, technology readiness, and engineering capabilities, Huawei has been able to continuously launch innovative products and solutions that keep ahead of market demand. I joined Huawei in 1993 to work in R&D, and have spent the vast majority of my career witnessing, taking part in, and leading Huawei's innovation journey – one shared by hundreds of thousands of people in our R&D team. Our commitment to talent is backed by a benefit-sharing mechanism that gives virtually every qualified employee an equity stake. We invest more than 10% of our annual revenue back into R&D, with a total R&D spend of more than 1.8 trillion yuan from 2007 to 2025. We have the utmost respect for others' intellectual property while protecting our own, with 245,000 patents granted to Huawei to date. Our system for effectively managing R&D investments has helped us bring together a large swathe of incredible engineers, laying a solid foundation for sustained innovation. All of these factors have enabled Huawei to keep pushing the limits of our products, launching one competitive offering after another to grow and thrive in highly competitive markets. Eric Xu September 29, 2026
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